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Strategies & Market Trends : John Pitera's Market Laboratory
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To: Chip McVickar who wrote (4521)8/30/2001 10:47:23 AM
From: John Pitera  Read Replies (1) of 33421
 
Chip, I agree with you friend that it's more of a question of when Argentina defaults than if.. as is pointed out,

when Argentina still has a fixed, overvalued exchange rate and a massive debt overhang.

There has been a trend of moving money our of emerging markets for several years now. I'm sure
many can recall when Money just flowed into the NIC's in Asia and else where in the early to mid 1990's
and the equity returns and other investment returns dwarfed anything comparable in the US or Europe.

But by 1995-96 the Returns in the US and Europe became expansive and attractive enough to start to diminish
interest in the Emerging Markets. And obviously since the Thai Baht devaluation of July 1997, the Hong Kong and
Asian Meltdowns, then coupled with Russia and LTCM in 1998..... the appetite had just gone away.

We're getting to the phase of the macro cycle where as Will Roger's aptly stated it, I'm interested in the
return of My CAPITAL and not a return on my Capital

Japan, is an interesting situation, even today on CNBC we hear some valid comments that by some metrics,
30% of all Global savings by Investors are by the Japanese;however there are a lot of ways to calculate many of
these more obscure ratios.

It's going to be interesting to see how the Macro trends in currencies play out over the next couple of years.

John
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